Usually when there’s a medical emergency for you or a family member, the cost is the last thing on your mind. You just want to do anything you can to get well again. However, once the emergency is over, the bills can be crippling.
Did you know that the most common cause of bankruptcy in the United States is medical debts? In fact, one study out of Harvard University found that 62% of personal bankruptcies were precipitated by medical debt. And while you may think that health insurance protects you against this kind of disaster, the study also found that almost 80% of these people had health insurance. Over 50% of medical expense bankruptcies occur between age 35 and 55, not usually ages when you think that huge medical costs will be incurred.
An accident or illness that requires a long hospital stay, or multiple surgeries, or even long-term physical therapy can create piles of medical bills that quickly burn through savings, retirement, home equity, and college funds, even with health insurance in place to supposedly protect you.
The Complicated Process of Medical Billing
Medical bills can be even more overwhelming thanks to the billing methods from hospitals. They might bill you separately for the ambulance, the hospital stay, the operating room, and the anesthesiologist. It gets even trickier when insurance is involved and they offer to help pay for some things and not others, and the copay or deductible is separately applied to each individual bill.
To add to the chaos, the billing process itself can incur more debts, if the original debts aren’t discharged in a timely manner. Getting late charges and interest can multiply your original debts significantly.
Another problem that can crop up is transferring your medical debts to credit card debt. Some hospitals and medical care providers even encourage patients to use credit to pay off medical debts, just so that they get their payment earlier. However, this can cause more problems for the debtor in the future. If you pay off medical expenses with credit cards, the debt is changed into consumer debt, which can affect your ability to get financial assistance, hit your personal credit and increase personal liability.
Some Tips to Protect You from Crippling Medical Debt
- First of all, don’t avoid necessary care because of the costs incurred. Yes, you might ask for alternative options, but have a real discussion with your doctor and express your concerns. Avoiding care because of cost can actually cause more emergencies and bills in the future. This is especially true for avoiding prescription medications because of cost. Often the doctor can give you other options if this is a major concern for you.
- You have the right to look over your bills and dispute them. So keep careful records, and ask questions to make sure there are no mistakes in there. Check the dates of each charge incurred to see if it matches when you were (or your loved one was) in the hospital. Check the cost of each procedure. You can even shop around and ask various medical institutions what the average cost is for certain procedures to see if the charge is accurate and fair.
- If you need to pay off the debt over time, your best option is to consult directly with the hospital or medical care provider in order to get to a payment plan that will work for you. They usually offer one, and will usually offer you the best options (i.e. lowest interest rates and personal liability.)
- Here’s something that’s important to remember: insurance companies barter down the cost of medical expenses a lot. It’s part of their function. If you don’t have insurance, you can do it yourself. The hospital would rather be paid something than nothing. And even if you do have insurance, you can still barter down costs. After all, with growing premiums and lowered coverage, your insurance doesn’t do everything you might assume it does.
- Make sure that the payments that your insurance is responsible for are actually paid, and on time. Follow up with your insurance company to make sure that you don’t get hit with late fees because of their lack of payment.
- Always have an emergency fund for things like this, even if you have medical insurance. If you can avoid payment plans, you significantly decrease the total amount that you’ll have to pay.